Taking performance cues from east Asian markets

Dr Chris Baumann

Dr Chris Baumann is an associate professor at Macquarie University in Sydney, researching competitiveness, education, East Asia and customer loyalty. He has authored more than 50 refereed journal articles and conference papers with more than 350 citations. He has been awarded for his research and teaching, including from the Australian government for enthusiastic approach to education. Dr Baumann is also visiting professor at Seoul National University (SNU) in Korea and at Aarhus University, Denmark. He introduced ground breaking concepts: Competitive Productivity, Latecomer Brand, Premium Generic Brand (PGB) and the ‘country of origin of service staff (COSS)’ effect. He has a long-standing relationship with Simon Fraser University (SFU), Canada, as MBA Alumni and research collaborator.

As the ‘Asian century’ becomes ever more prevalent and the Fourth Industrial Revolution gathers speed, marketers are having to surf a tidal wave of creative destruction. The choice is stark: Embrace change, or resign yourself to a Darwinian fate. 

With this in mind, we spent the last couple of years writing a book about Confucianism, Discipline and Competitiveness (CDC). Here is a summary of our findings and conclusions. 

‘Confucian Orbit’ performance

For the sake of convenience, let’s divide the world into six groupings:

  • Confucian Orbit countries
  •  Anglo-Saxon countries
  • Western European countries     
  •  Eastern European countries       
  •  Latin American countries            
  •  Middle Eastern and North African countries

To cut a long book chapter short, we discovered evidence which confirmed what many intuit: The Confucian Orbit bloc – made up of Mainland China, Hong Kong, Japan, South Korea, Singapore, Taiwan and Vietnam – is outperforming the West.

There’s lots of data to support this contention but let’s confine ourselves to competitiveness as measured by the Programme for International Student Assessment (PISA) and World Economic Forum (WEF). PISA shows school students in the Confucian Orbit have been outperforming their peers in Anglo-Saxon and Western European countries for the last two decades. According to the World Economic Forum (WEF), Confucian Orbit economies have been the most globally competitive since at least 2008.

How did we get here? The first and second industrial revolutions were synonymous with Westernisation. For the last 150 years or so, East Asian nations wanting to modernise studied countries such as England, Germany and the US, then frequently embraced their institutions, technologies and business practices.

Often, East Asian nations finessed Western inventions to the point where their origins were forgotten. Continuous-improvement processes are so associated with Japanese companies today, for instance, the word Kaizen has entered the English language. Few remember Japan’s post-war CEOs learnt about continuous improvement from American consultant, W Edwards Deming.

There are now lots of would-be consultants claiming to possess the secrets of East Asian success. There is no secret per se. Credible academics who study East Asia reach the same conclusion: The economic dynamism of Confucian Orbit societies is largely a result of discipline.

Put bluntly, people in these societies study and work harder than the rest of us. East Asians exhibit greater self-discipline than non-East Asians, accepting strict discipline meted out by parents, teachers and, in some ways, bosses.   

A growing fascination

It’s now the West, which has been struggling since the GFC (or arguably since the post-war boom fizzled out in the mid-1970s), looking to the East for inspiration. This long march of the Confucian Orbit countries through the West’s institutions, corporations and markets has been underway for decades and is reaching an inflection point.

Take, for example, the automotive industry. Granted, plenty of cars are still dreamt up in German or American design studios. But they are more often than not made in Asia. After buying one of Sweden’s best-known companies in 2010, Chinese conglomerate, Geely Holding Group, embarked on successful ‘green’ rebranding. This allowed Volvo to better appeal to environmentally conscious, upper-middle-class consumers, facilitating its return to profitability.

It’s also no coincidence industrious and meticulous East Asian smartphone, electrical goods, semiconductor and garment makers are products of families where self-discipline was expected and schools where work ethic, punctuality, respect and manners were enforced.

Given East Asia’s academic and economic success story, there is now growing interest in how it has been achieved. Western educational authorities are looking to their counterparts in East Asia and a thousand flowers are blooming at schools in the UK, where educators are experimenting with East Asian textbooks and perhaps teaching methods. They are doing this in the hope of replicating East Asian test scores and, ultimately, East Asian economic dynamism.

Making false choices

By this point, you may be attempting to reassure yourself there is an inescapable trade-off between creativity and discipline (an often-heard cliché). Or that a choice has to be made between being a disciplined drone and imaginative bohemian. This romantic notion seems to be particularly appealing to Westerners who work in industries such as marketing, in which creativity is celebrated.

This idea is not accurate. While it’s self-destructive types who make the best fodder for news articles, books and biopics, most creative workers lead disciplined lives involving strict routines, long hours and constant striving in the face of adversity. Gustav Flaubert famously advised, “Be regular and orderly in your life, so that you may be violent and original in your work.” Similarly, Klaus Schwab is known for both his creativity (he founded the WEF) and for having a disciplined work ethic.

The ‘Asians aren’t creative’ trope certainly doesn’t stand up to scrutiny either. There’s no dearth of accomplished East Asian architects, composers, film directors, novelists, painters and video game designers. Companies such as Alibaba, Baidu, Samsung, LG, Singtel, Sony, Hyundai, Kia and Toyota don’t appear to have an issue creating innovative products and services. And the world has East Asians to thanks for anime, calligraphy, Chinese opera, ikebana, kabuki, karaoke, K-pop, manga, most martial arts, origami, ukiyo-e prints and even tattoos.

Westerners invented the technologies that drove the first and second industrial revolutions. But East Asians were already making their presence felt by 1969, when the third one kicked off. They will undoubtedly play an outsized role as we push into the Fourth Industrial Revolution. For example, China is working to become a major player in AI, biopharmaceuticals and robotics by 2025.  

What’s more, cultural identity is being retained. At the end of the 19th century, the Japanese introduced a staggering amount of Western political, legal and business institutions and ideas into their society. South Korea went through a somewhat similar process after 1961, as did China after 1978. These countries welcomed modernisation and enjoyed spectacular economic growth. Yet the Japanese remain distinctly Japanese, the Koreans unmistakeably Korean, and the Chinese proudly Chinese.

We argue those outside the Confucian Orbit can make use of the best bits of Confucianism without having to sacrifice their national identity. It seems unlikely Americans will suddenly see the merits of self-effacing modesty. Or that Australians will become obsessed with propriety. But there is nothing to stop those in Anglo-Saxon and Western European nations adopting Confucian values, especially when it comes to education.  

Future of work

Yet despite this, social and economic changes generated by previous industrial revolutions have meant individuals can survive without discipline. After all, no one in the West starves to death in 2019 if they fail to join the hunting party or get a job.

However, individuals increasingly require self-discipline to thrive. Consider, for example, your career compared to that of your father’s or grandfather’s. Chances are your forebears left the education system relatively early and slowly worked their way up the career ladder. They almost certainly worked fixed hours in a regulated industry walled off from foreign competition by tariffs and regulated environments. There’s a good chance they were a member of a union advocating for their rights. Even if they weren’t, a Keynesian government arranged things to ensure they had a good shot at a comfortable middle-class lifestyle. 

Nowadays, if you’re not a micro-entrepreneur working in the gig economy, you’re expected to be an ‘intrapreneur’ at the business employing you. Make no mistake – you are locked in a globe-spanning, Darwinian competition.

And it’s a competition where CMOs with the drive to learn constantly, work tirelessly and hustle relentlessly take ever-greater share of the spoils. Marketing leaders would do well to embrace values such as future orientation, hard work and frugality. After all, these values set the scene for the original industrial revolution and a new era of industrial creativity. 

Tags: brand strategy, marketing strategy

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